Technical Advisory Committee Presentation to the ERCOT Board of Directors July 21, 2009

TAC Report Summary 5 PRRs for Board approval 5 PRRs for Board approval 3 NPRRs for Board approval 3 NPRRs for Board approval 1 RMGRR for Board approval 1 RMGRR for Board approval Report on Approved Market Guide Revision Requests Report on Approved Market Guide Revision Requests Recommended ERCOT Planning Charter revisions Recommended ERCOT Planning Charter revisions ICCP project update ICCP project update LaaRs study report LaaRs study report Preview: August, Sept., Oct. Board meetings Preview: August, Sept., Oct. Board meetings 2

Protocol Revision Requests PRR 805 Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS PRR 806 Re-Registration of Market Participant due to Mass Transition of Electric Service Identifiers PRR 807 Clarify Definition of Messaging System PRR 808 Clean-up and Alignment of REC Trading Program Language with PUCT rules PRR 815 CSC Process Clarification – URGENT 3

PRR 805 – Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS Purpose (Texas SET) This PRR will allow Market Participants (MPs) to see the POLR Customer class and the AMS meter flag when querying Electric Service Identifiers (ESI IDs) through the look-up function on the MIS. Benefit Market Participants will be able to identify the POLR Customer class of an ESI ID as well as whether or not the meter is an AMS meter. Market Impact N/A System Change Yes Project Required - Expected delivery Q1 or Q2 of 2010 AssumptionsN/A TAC Vote TAC recommended approval with one abstention from the Independent Generator segment with a recommended project priority of 2-High and a ranking of 32. All Market Segments were present. Effective Date Upon System Implementation

PRR 805 – Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact $50 -$100 K Credit Review is Pending Texas Market Link, Information Services Master, TIBCO, Retail Application Programmatic Interface Resource availability currently being reviewed.

PRR 806– Re-Registration of Market Participant due to Mass Transition ESI IDs Purpose (Texas SET) Requires re-registration as a Market Participant if they transfer Electric Service Identifiers (ESI IDs) from one Competitive Retailer (CR) to another using the Mass Transition process. Benefit Supports the interim solution for facilitating the transfer of ESI IDs from one CR to another using the Mass Transition process. Market Impact Any Market Participant utilizing the Mass Transition process will be required to re-register with ERCOT. System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present Effective Date August 1, 2009

PRR 806– Re-Registration of Market Participant due to Mass Transition ESI IDs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending

PRR 807 – Clarify Definition of Messaging System Purpose(ERCOT) Revises the definition of “Messaging System” to include a process that makes Real Time messages available to “bidding Qualified Scheduling Entities (QSEs)” without Resources. Benefit QSEs that do not represent Resources and are qualified to submit Balancing Energy Service market bids as bidding QSEs in accordance with Section , Balancing Energy Service Bids from Bilateral Contracts, will have access to the Real Time awards generated by the Market Operating System (MOS). Market Impact N/A System Change Minor No Project Necessary – Market Operating System and Market User Interface AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present Effective Date Upon System Implementation

PRR 807 – Clarify Definition of Messaging System Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending Market Operating System and Market User Interface Minor impact managed under O&M

PRR 808 – Clean-Up and Alignment of RECs Trading Program Language with PUCT Rules Purpose(ERCOT) Aligns Protocol language with PUCT Substantive Rules and updates Renewable Energy Credit (REC) Trading Program language throughout the Protocols. Benefit Increased clarity and accuracy of the Protocols. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present Effective Date August 1, 2009

PRR 808 – Clean-Up and Alignment of RECs Trading Program Language with PUCT Rules Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending

PRR 815 – CSC Process Clarification – URGENT Purpose(ERCOT) Clarifies the process used to determine Commercially Significant Constraints (CSCs). Benefit Clarifies process for CSC determination. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC recommended approval as amended by PUCT comments with one opposing vote from the IOU Market Segment; All Market Segments were present. CEO Determination Necessary prior to the Texas Nodal Market Implementation Date Effective Date August 1, 2009

PRR 815 – CSC Process Clarification – URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending

Nodal Protocol Revision Requests NPRR 158 EILS Self-Provision Formula Correction and Clarifications NPRR 171 Synchronization of PRR 805, Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS NPRR 172 Synchronization of PRR 806, Re-Registration of Market Participant due to Mass Transition of ESI IDs 14

NPRR 158 – EILS Self-Provision Formula Correction and Clarification Purpose(ERCOT) Proposes to correct terms contained in the Settlement equations related to EILS Self-Provision to make the formulas consistent with the verbal description of EILS Self-Provision Settlement and the author’s stated original intent. Benefit Clarity in the Nodal Protocols Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval. All Market Segments were present. CEO Determination Necessary prior to the Texas Nodal Market Implementation Date

NPRR 158 – EILS Self-Provision Formula Correction and Clarification Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

NPRR 171 – Synchronization of PRR805, Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS Purpose (Texas SET) Will allow Market Participants to see the POLR Customer class and the AMS meter flag when querying Electric Service Identifiers (ESI IDs) through the look-up function on the MIS. Benefit Market Participants will be able to identify the POLR Customer class of an ESI ID as well as whether or not the meter is an AMS meter. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval. All Market Segments were present. CEO Determination Necessary prior to the Texas Nodal Market Implementation Date

NPRR 171 – Synchronization of PRR805, Adding POLR Customer Class and AMS Meter Flag to the Database Query Function on the MIS Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending

NPRR 172 – Synchronization of Section 15 with PRR782, Clean-Up and Corrections to Terminology and Transaction Timings in Protocol Section 15, Customer Registration Purpose (Texas SET) Corrects and clarifies the transaction timing descriptions to make them consistent with current processes outlined in Section 15 of the Zonal Protocols Benefit Clarifies market processes. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval. All Market Segments were present. CEO Determination Necessary prior to the Texas Nodal Market Implementation Date

NPRR 172 – Synchronization of Section 15 with PRR782, Clean-Up and Corrections to Terminology and Transaction Timings in Protocol Section 15, Customer Registration Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Credit Review is Pending

Retail Market Guide Revision Request RMGRR 078 Adding Additional Fields to the Customer Billing Contact Information File – URGENT Adds a customer field to the Customer Billing Contact Information File to comply with recent PUCT POLR Rule (Project No ) and makes other language changes consistent with revised PUCT rule terminology Adds a customer field to the Customer Billing Contact Information File to comply with recent PUCT POLR Rule (Project No ) and makes other language changes consistent with revised PUCT rule terminology Customer information is not public, but is shared with acquiring REP during a mass transition event Customer information is not public, but is shared with acquiring REP during a mass transition event CEO Determination: No nodal impacts and necessary to comply with PUCT rule CEO Determination: No nodal impacts and necessary to comply with PUCT rule Minor cost impact managed under O&M. No system project required for implementation. Minor modification to PaperFree software. Implementation anticipated one month after Board approval. Minor cost impact managed under O&M. No system project required for implementation. Minor modification to PaperFree software. Implementation anticipated one month after Board approval. 21

Market Guide Revisions Approved RMGRR 075 Advanced Meter Interval Data File Format and Submission Describes the process and file format for submitting Advanced Meter interval data Describes the process and file format for submitting Advanced Meter interval data RMGRR 077 Prepay Priority Code 05, Disconnect for Non-Pay and Reconnect after DNP Creates Texas SET code for disconnect and reconnects for Pre- pay Advanced Meters capable of remote disconnect and reconnect Creates Texas SET code for disconnect and reconnects for Pre- pay Advanced Meters capable of remote disconnect and reconnect COPMGRR 013 Update to Section 3, Organizational Structure Combines Data Extracts Work Group and Settlement and Data Aggregation Work Group to create the Settlement and Extracts Work Group Combines Data Extracts Work Group and Settlement and Data Aggregation Work Group to create the Settlement and Extracts Work Group 22

ERCOT Planning Charter Revisions In January, ERCOT Staff presented recommended changes to the ERCOT Planning Charter. TAC endorsed the proposed changes. In January, ERCOT Staff presented recommended changes to the ERCOT Planning Charter. TAC endorsed the proposed changes. The Board approved the revisions except the proposal to exempt transmission projects relating to generation interconnection from ERCOT and RPG review. Treatment of such facilities was remanded to TAC for further discussion and recommendation. The Board approved the revisions except the proposal to exempt transmission projects relating to generation interconnection from ERCOT and RPG review. Treatment of such facilities was remanded to TAC for further discussion and recommendation. The current Planning Charter language requires generation interconnection projects costing more than $15 million or requiring CCNs be reviewed by the RPG (including ERCOT independent review and Board approval as appropriate). The current Planning Charter language requires generation interconnection projects costing more than $15 million or requiring CCNs be reviewed by the RPG (including ERCOT independent review and Board approval as appropriate). 23

ERCOT Planning Charter Revisions Consensus on 2 procedural changes for TSPs to raise visibility of large generation interconnection projects Consensus on 2 procedural changes for TSPs to raise visibility of large generation interconnection projects Require in Generation Interconnection (GI) Procedure that the Lead TSP for the Full Interconnection Study (FIS) communicates to other TSPs when the FIS indicates that the direct interconnection facilities will cost >$50 million so that the other TSPs will know to particularly focus on the FIS Require in Generation Interconnection (GI) Procedure that the Lead TSP for the Full Interconnection Study (FIS) communicates to other TSPs when the FIS indicates that the direct interconnection facilities will cost >$50 million so that the other TSPs will know to particularly focus on the FIS The Lead TSP for GI FIS will communicate direct generation interconnection projects >$50 million out to full RPG (no review by RPG) once generation Interconnection Agreement is signed The Lead TSP for GI FIS will communicate direct generation interconnection projects >$50 million out to full RPG (no review by RPG) once generation Interconnection Agreement is signed 24

ERCOT Planning Charter Revisions TAC recommends the ERCOT Board approve version 3.1 of the ERCOT Regional Planning Group Charter and Procedures TAC recommends the ERCOT Board approve version 3.1 of the ERCOT Regional Planning Group Charter and Procedures TAC proposes amendments to Section on page 6 and Section on page 7 to require ERCOT to perform independent economic analysis of the transmission projects associated with generation interconnection which are expected to cost at least $25 million TAC proposes amendments to Section on page 6 and Section on page 7 to require ERCOT to perform independent economic analysis of the transmission projects associated with generation interconnection which are expected to cost at least $25 million The ERCOT analysis will be posted along with the other generation interconnection-related studies once the Interconnection Agreement is signed between the generator and the Transmission Service Provider The ERCOT analysis will be posted along with the other generation interconnection-related studies once the Interconnection Agreement is signed between the generator and the Transmission Service Provider 25

ICCP project update TAC approved OGRR 222 in June which changed the required communication technology for QSE frequency control data from Remote Terminal Unit (RTU) only to RTU or Inter- Control Center Communication Protocol (ICCP) TAC approved OGRR 222 in June which changed the required communication technology for QSE frequency control data from Remote Terminal Unit (RTU) only to RTU or Inter- Control Center Communication Protocol (ICCP) All QSEs will use ICCP in nodal environment. OGRR 222 allows early conversion to free up ERCOT data center space by eliminating some duplicate technology support All QSEs will use ICCP in nodal environment. OGRR 222 allows early conversion to free up ERCOT data center space by eliminating some duplicate technology support Only 3 of 83 QSEs have made the ICCP conversion to date Only 3 of 83 QSEs have made the ICCP conversion to date Other QSEs are reportedly considering ICCP conversion Other QSEs are reportedly considering ICCP conversion OGRR 222 has not yet yielded the data center benefits anticipated by ERCOT OGRR 222 has not yet yielded the data center benefits anticipated by ERCOT 26

LaaRs study update LaaRs study is complete LaaRs study is complete Recommended keeping LaaRs at no more than 50% of RRS, whether RRS is procured at 2300 MW level or 2800 MW level Recommended keeping LaaRs at no more than 50% of RRS, whether RRS is procured at 2300 MW level or 2800 MW level Reliability concerns raised with “overshooting” since Protocols Section allows LaaRs to respond up to 150% of the amount requested by ERCOT Reliability concerns raised with “overshooting” since Protocols Section allows LaaRs to respond up to 150% of the amount requested by ERCOT Possible next step would be to study geographically dispersed tiered UFR settings to allow greater LaaRs participation in RRS Possible next step would be to study geographically dispersed tiered UFR settings to allow greater LaaRs participation in RRS 27

Preview: Future Board meetings August August PRRs 787, 801, 810 PRRs 787, 801, 810 Progress Report - NOGRR 025 Monitoring Program for QSEs, TSPs, and ERCOT Progress Report - NOGRR 025 Monitoring Program for QSEs, TSPs, and ERCOT Update on wind metrics Update on wind metrics September September 2010 CSC Recommendation 2010 CSC Recommendation October October 2010 CRE Recommendation 2010 CRE Recommendation Report on PRR 773 effectiveness Report on PRR 773 effectiveness 28